Agenda item

RECOMMENDATIONS:

That:

1.    It is recommended that scrutiny committee comment on the proposals within the attached cabinet report, which can then be considered by cabinet prior to its meeting in February 2024.

2.    It is noted that the committee will be presented with an updated General Fund Budget report at its meeting on the 6th February 2024 prior to Cabinet on the 8th February 2024 and Full Council on the 22nd February 2024.

Councillor Cutler, Deputy Leader and Cabinet Member for Finance & Performance introduced the report, ref CAB3430 which set out proposals concerning the General Fund Budget Options & Medium-Term Financial Strategy (available here). The introduction included the following points.

1.    The public sector faced significant financial challenges and demand pressures, with many upper-tier and unitary authorities warning that they might have to issue section 114 notices in the near future. Moreover, 52% of district councils were warning that they would have to utilise reserves to produce a balanced budget. The City Council's immediate financial position until 2026 was sound and stable, outlined in a strategy to manage limited financial resources to protect the core Council service.

2.    However, the medium-term Financial Plan in Appendix 1 showed a projected annual budget shortfall of £3.4 million per annum, increasing to £5.7 million in 2029.

3.    There was an increased deficit over the medium-term financial strategy published last year. The gap reported primarily resulted from new responsibilities placed on district councils, particularly focusing on significantly increasing recycling rates.

4.    There was a window of opportunity to steer the Council towards financial sustainability in the future, and robust measures were being put in place to address medium-term budget challenges.

5.    The paper outlined some aspects of TC25, an organisation-wide transformation program aimed at delivering changes and achieving £3.5 million in savings within three years. The aim was to transform services to save money, digitise, and reduce the carbon impact of service delivery. Efforts were being made to make services more accessible, simplifying online access while enabling the majority of customers to access services as required.

6.    Investments were planned to digitise and modernise services, alongside allocating additional funding to address unavoidable budget pressures like providing temporary accommodation.

7.    The paper also detailed assumptions concerning service income budgets, emerging capital budgets, and the adequacy of reserves.

The committee was recommended to comment on the proposals within the attached report, ref CAB3430 which had been considered by the cabinet at its meeting on 21 November 2023. Comments and any resolution of the committee would be tabled at the Cabinet Member Decision Day on the 4^th of December 2023.

The report contained several recommendations, which covered a range of issues including the following:

1.    To note the assumptions outlined in Section 13 of the report and the projections detailed in Appendix A.

2.    To approve the Medium-Term Financial Strategy in Sections 13 to 17 of the report.

3.    To approve the preparation of a detailed budget to present to the Council in February 2024. This budget would be based on the assumptions from the Medium-Term Financial Strategy, final spending review announcements, and specific options including financial allocations for carbon reduction, digital transformation, service funding adjustments, Council Tax increase, and reserve establishment.

4.    To approve an inflationary increase in the Waste Collection contract cost, necessitating a corresponding CPI rate increase to Garden Waste subscriptions from March 2024 onwards, resulting in charges rising to £45 for small bins and £69 for large bins while maintaining the concessionary price at £29.

The committee proceeded to ask questions and debate the report. In summary, the following matters were raised.

1.    If the TC25 programme failed to generate the expected savings, what backup risk mitigation strategies were in place?

2.    The risk involved if the assumption of 80% government funding for expanding recycling services, particularly incorporating food waste, did not come to fruition.

3.    Whether process manuals or quality manuals detailing council operations and procedures had been produced.

4.    There was a discussion regarding the impacts of inflation, borrowing costs, and construction expenses, specifically concerning projects such as Central Winchester Regeneration and Station Approach, questioning their viability and reviewing their status within the current context.

5.    There was a request for clarification about carbon and nutrient offsetting mentioned in paragraph 7.3 on page 42.

These points were responded to by Liz Keys, Chief Finance Officer, Councillor Cutler, Deputy Leader and Cabinet Member for Finance & Performance and Laura Taylor, Chief Executive accordingly.

RESOLVED:

That officers and the Cabinet Member were requested to consider the following matters.

1.    To consider options for further communication to Councillors of the TC25 programme and opportunities for member involvement and engagement.

That concerning paragraph 16.10 of the report, and in relation to the impact of the cost of borrowing and inflation, officers were asked to confirm which projects had been removed from the programme in February 2023.